Very Light Trading Leads Apple Lower

We are going to reuse our opening line from Fridayis Stock Watch by saying if you are going to read through the stock prices below get used to the words "down" and "light volume." All of the stocks we track in the Stock Watch moved lower with the exception of Earthlink. All of them traded on very light volume with the exception of Intel.

Intel is reportedly about to initiate a price war against AMD that sent shudders through the chip sector today. Dan Niles of Lehman Brothers issued a report this morning saying that Intel would be making a move to recapture lost market share from AMD this Fall. From a Reuters report:

For those who thought the price war was already aggressive, you havenit seen anything yet," wrote Lehman Brothers analyst Dan Niles in a note-to-clients issue on Monday. "In an aggressive move to take back market share, we believe Intel is planning to detonate a price bomb on AMD by cutting prices about 50 percent on high-end Pentium 4 processors," he wrote.

Intel moved lower by 1.40 on strong volume. AMD moved down 1.63, also on strong volume. The broader effect of this report was to scare investors and analysts into another earnings scare. This sent a lot of money to the sidelines as few were willing commit to anything. The Nasdaq traded little more than a billion shares and the Dow barely topped 800 million. All eyes once again turn to the future and some more definitive signs that the economy is recovering.

Industry News

Microsoftis latest indirect contribution to the world economy is known as Code Red II. Code Red II is a new variant of the Code Red virus, and it can infect any server that is still subject to the exploit of which Code Red takes advantage. This time, however, it leaves a backdoor that any other wannabee hacker can use to take over that server. Very handy. From a Reuters report:

"Every single human being on the Internet with a clue can break into your server if you have been infected by Code Red II," said Alan Paller, research director at the Systems Administration, Networking and Security Institute (SANS). "If you have credit card numbers stored on your Web server you have to consider them forfeit," Paller added.

The same patch to Microsoftis IIS server that protected against Code Red will keep Code Red II out. That means that servers that have already been patched for Code Red are immune to this particular variant. We wish those foolish enough to trust their businesses to Microsoftis servers without keeping abreast of the myriad of patches the best in luck in dealing with this. So far, there seems to be no direct backlash against the companyis stock relating to this latest security breach.

Reuters is reporting that an injunction that keeps Windows XP from shipping is unlikely to be granted. This bodes well for Microsoft.

Apple Industry News

AAPL started the day off a tad low, and then moved briefly into positive territory. The stock them moved lower and stayed that way throughout the rest of the trading session. Demonstrating a lack of conviction in the downward mode, volume was the lightest we have seen for a non-holiday trading session at 1.7 million shares trading hands, since we started the Stock Watch in 1999. The dayis trading range was 19.001 - 19.66.

Apple closed at 19.13, down 0.37 ()-1.90%), on stunningly light volume 1,779,500 shares trading hands.

The Nasdaq closed at 2034.26, down 32.07 (-1.55%), on volume of 1,099,641,000 trading hands.

The Dow closed at 10401.31, off by 111.47 (-1.06%), on volume of 819,261,000 trading hands.

The S&P 500 closed at 1200.48, down 13.87 (-1.13%).

Adobe closed at 36.76, down 1.18 (-3.11%), on light volume of 2,656,100 shares trading hands.

Akamai closed at 7.48, down 0.27 (-3.48%), on light volume of 830,700 shares trading hands. Apple is a large shareholder of Akamai.

Earthlink closed at 15.06, a gain of 6 cents (+0.40%), on light volume of 1,145,200 shares trading hands.

IBM closed at 106.51, down 1.67 (-1.54%), on light volume of 4,176,800 shares trading hands.

Macromedia closed at 16.80, off by 1.01 (-5.67%), on light volume of 404,000 shares trading hands.

Motorola closed at 18.60, down 3 cents (-0.16%), on very light volume of 5,082,900 shares trading hands. Motorola manufactures the processors used in Appleis Macintosh line.

Dell closed at 27.84, down 0.23 (-0.82%), on very light volume of 15,478,400 shares trading hands.

Gateway closed at 11.11, down 8 cents (-0.71%), on light volume of 1,068,400 shares trading hands.

Intel closed at 30.28, down 1.40 (-4.42%), on strong volume of 54,185,900 shares trading hands.

Microsoft closed at 66.13, a loss of 0.76 (-1.14%), on very light volume of 13,916,700 shares trading hands.

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